FX levels to watch – EUR/USD, GBP/USD, USD/JPY

The euro looks set for further losses, while sterling is attempting to continue its rebound from Friday’s lows.

Source: Bloomberg

EUR/USD turns lower again

A fresh low for EUR/USD on Friday confirms the downtrend, and the subsequent rally appears to be running out of steam at $1.1750.

Further losses that break the Friday low will then challenge the key $1.1662 level. If this goes, then the $1.15 area comes into play. A move above $1.18 is needed to provide indications that further gains are on the way.

GBP/USD tries for a bounce

Sterling bulls will be hoping that the bounce off the lows on Friday for GBP/USD marks the end of the pullback from the $1.36 September highs.

However, for this to materialise we will need a close above the 50-day simple moving average (SMA) at $1.3135, which will create a new higher high, above the $1.3290 seen early last week. A move through Friday’s $1.3027 low would then leave the pair targeting the rising trendline off the March lows. 

USD/JPY falls away from ¥113

Friday’s spike and then swift reversal from ¥113.00 would seem to suggest that the dollar bears are back in control, although the ¥112.30 zone has provided good intermediate support for USD/JPY over the past two weeks.

Below this, ¥111.46 and then ¥111.07 come into play as downside targets. A close above ¥113.50 is needed to put a more bullish outlook on the situation.

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